Starbucks and Microsoft Blend Coffee Retailer's Expertise With Technology Leader's Software and Services to Deliver Wireless Coffeehouse Experience

MobileStar to Provide High-Speed Wireless Internet Access and Infrastructure

Starbucks Coffee Co. (Nasdaq:SBUX) and Microsoft Corp. (Nasdaq:MSFT) today announced a strategic relationship to create a high-speed, connected environment in Starbucks locations across North America using MobileStar Network Corp.'s wireless broadband network.

Customers will be able to access broadband content and services using their own wirelessly enabled laptops, smart phones, Pocket PCs and other handheld devices -- all while enjoying a cup of Starbucks coffee.

The relationship combines Starbucks expertise in creating an inviting and relaxing coffeehouse experience with Microsoft's state-of-the-art technologies and MSN(R) content and services. MobileStar, a leading wireless broadband Internet service provider, will deploy the network infrastructure beginning in late spring, delivering an enhanced consumer experience for Starbucks customers. The planned technologies represent an early step in Microsoft's delivery on the .NET vision of software that empowers users any time, any place and on any device and Starbucks' desire to address the changing lifestyles of its customers.

"Starbucks' customers will enjoy an even better in-store experience, thanks to our combining Microsoft software and technology with Starbucks' focus on serving its customers' needs," said Steve Ballmer, president and CEO of Microsoft. "We're really pleased to be working with Starbucks on this project. Starbucks is not only a great Seattle neighbor, but one of the world's leading retailers and among the best-known and best-respected brands on the globe."

During the coming year, the companies will work together to develop services that leverage the power of the wireless broadband network. For example, customers will be able to download the latest information on local arts and entertainment and shop online while enjoying their beverage. In addition, customers using the MobileStar wireless broadband service will be able to check their e-mail and even access corporate intranets to stay connected to the office.

"This 'one of a kind' national wireless broadband network gives Starbucks a unique position in the landscape of retailers," said Howard Schultz, chairman and chief global strategist at Starbucks. "These new relationships will provide us a great opportunity to enhance our existing customers' in-store experience as well as attract new customers to our retail locations."

The in-store network complements a broader Starbucks effort to update store technology to streamline operations and communications. Ongoing infrastructure enhancements will support improved labor scheduling, planning and training as well as provide a platform for initiatives such as the launch of a Starbucks customer card that will speed up in-store ordering and payment and the capability for customers to preorder drinks over their cellular phones.

"A focus on continually improving store operations and enhancing our customers' experience underlies our success as a retailer," said Darren Huston, senior vice president of New Ventures at Starbucks. "These agreements enable us to take a big step toward both goals at the same time. Working with focused, strategic companies like Microsoft and MobileStar will ensure that we fully capture this opportunity to improve our core business more quickly."

Mark Goode, CEO of MobileStar, said, "Our company is intensely focused on meeting the needs of our customers by providing them with personalized and distinctive experiences. The agreement with Starbucks solidifies our strategic initiatives and supports the growth of our network as we continue to provide high-speed wireless broadband Internet access and value-added applications to our customers where and when they need them."

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